EU officials say they will soon unveil new rules that could make foreign companies sue the UK in UK courts in a bid to stop them leaving.
A draft regulation that is due to be unveiled by the end of the year has already been criticised for allowing foreign companies with UK subsidiaries to bring lawsuits against the country.
EU diplomats have also been pushing for an EU law that could help protect UK firms and workers from the possibility of being sued in the courts in the EU, but the draft law will only be formally put into effect once the EU has passed legislation on the matter.
“If a UK company wants to sue for unfair competition or unfair business practices, then it is not enough to just lodge a complaint in a British court.
It needs to file a complaint with the European Commission and, ideally, with the ECJ.
That is the main obstacle,” said a senior EU official, who asked not to be named.
The European Commission has been pushing hard for the UK to be able to sue foreign companies for unfair business practice.
But some members of the European Parliament have called for the EU to create a new legal mechanism to ensure foreign firms can sue in UK court.EU negotiators have also argued that foreign companies should be allowed to bring their lawsuits in UK domestic courts, arguing that is the most likely route for them to be successful.
“The UK’s current domestic courts are very slow to respond to cases, and they have become a target for foreign competitors, who have been able to challenge them in foreign courts, often with very little success,” said the EU official.
“We have to have a new mechanism for foreign courts to deal with these cases.”
The UK has a reputation for being a tough and uncompromising jurisdiction, with some of the toughest anti-money laundering laws in the world, but that has been undermined by the EU’s stance on tackling money laundering.